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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
GR No. L-5968 August 5, 1953
CLARO RIVERA, Rizalina S. RIVERA, LOPE K. Sarreal and ASSOCIATED INSURANCE & SURETY CO., INC.,
Recurrent
vs.
THE HON. Felicsimo OCAMPO, CATHAY CERAMIC, INC. and JESUS L. UY, appealed.
Josephite D. O. Ocampo in representation of the appellants.
Benjamin Relova in representation of Cathay recurida Ceramics, Inc.
Emiliano D. Calma in representation of the respondents Felicisimo and Jesus Ocampo L. Uy.
PAUL, J.:
In the civil case No. 17111, entitled Atkins, Kroll & Co., Inc., plaintiff, against Cathay Ceramics, Inc., Lope Sarreal,
Associated Insurance & Surety Co., Inc., Rizalina S. Rivera, Jesus Rivera and Clear L. Uy, defendants filed on July
29, 1952 in the Court of First Instance of Manila, the applicant requested that the court decide who or who among
the defendants are entitled to the sum of P21, 792.49 deposit that the applicant in court clerkship. This amount
represents the value of the second batch of steel rails sold to the applicant Atkins, Kroll & Co. Inc. by Cathay
Ceramics, Inc., under a contract existed between the two on April 25, 1952; and according to the agreement, the
first shipment was sent to the applicant by the Ceramics Inc. on June 20, 1952, at a total cost of P25, 789.45, and
consignment seguanda Riding P21, 792.49, is envioen 17 July of the same year.
According to demand, Jesus L. Uy, through suabogado Jose L. Uy, right preferential claim on the amount of the
second batch EXCLUDING Rizalina S. Rivera and Associated insurance & Surety Co., Inc.; that these two
appellants, in turn, claimed preemption, admitting, however, the Associated Insurance & Surety Co., Inc., that the
P21, 792.49 must be paid before the claim of Rizalina S. Rivera and the balance queel pay for it.
These claims are contrary to those which gave rise to Atkins, Kroll & Co., Inc. was forced to file suit in interpleader
and deposited the sum of P21, 792.49 in court clerkship.
On July 30, 1952, one day after the suit was filed, the Cathay Ceramics, Inc. presented an urgent motion asking that
the permit withdraw the deposit of P21, 792.49 to replace it with a bail and pointing out July 31 for view of the
motion, which was opposed Rizalina S. Rivera and Associated Insurance & Surety Co., Inc. The motion was seen
before the Honorable Judge Temporarily Zulueta then presided Room 7. to the Court of First Instance Manila; but,
instead of resolving, endorsement record Hon Judge Ocampo then presided Room 5. heard the parties at August 4,
ie the next day, August 5, the Honorable Judge Ocampo dictate an order whose part is:
Wherefore, the Court hereby authorizes the Clerk of Court to deliver, out of the sum of P21, 792.49 deposited
in his Office, the sum of P19, 800.00 to defendant Jesus L. Uy and the balanceof P1, 992.49 to defendant
Cathay Ceramics, Inc ., upon the filing by the said defendant Cathay Ceramics, Inc., of a surety bond in the
sum of P25, 000.00, one of the conditions of Which Shall Shall not be that the surety pay to the Claimants
HEREIN upon the adjudication of Their several claims by This Court Immediately and without the necessity of
any further suit in court to enforce collection upon Such bond.
The authority HEREIN Granted Shall take effect upon the approval of the abovementioned bond.
Upon hearing the order, Rizalina S. Rivera and Associated Insurance & Surety Co., Inc. filed an urgent motion for
reconsideration, with an additional request that in the event that your mocionde reconsideration is refused, is not
made the THE AMOUNT withdrawal recorded while he was pending in the Supreme Court a petition for certiorari;
Juezrecurrido significi that would deny the motion for reconsideration and would order the execution of the order of 5
August unless receiving a restraining order.
August unless receiving a restraining order.
The appellants came to this Court, claiming in his application that the judge resorted sujurisdiccion am working in
excess or with grave abuse of discretion to order expedirsu August 5; who have no other remediofacil, simple and
expeditious in the ordinary course of the proceedings but this action and requested that the contested order were
revoked and, meanwhile, that a preliminary injunction will be issued with. The requested order was issued.
Cathay Ceramics, Inc. contends that there is no legal provision that prohibits the court to allow a party to an action
of interpleader remove the tank that is the subject of the action provided that the rights of other stakeholders are
properly protegidospor through a security; and others contend that the order appealed is not unfair to the appellants
since the disputed order is worded so broadly that protects through a fianzade P25, 000 rights and interests of the
appellants, and that being Cathay Ceramics, Inc . the owner and supplier of steel rails, she is entitled to receive the
proceeds of such effects provided. Esteultimo argument does not fit the facts: the amount deposited, P19800 is
entragarian, according to order, and Jesus L. Uy only P1, 992.49 to the Cathay Ceramics, Inc.
There is much difference between P21, 792.49 deposited in the clerkship, available at any time by the clerk to the
first indication of the court, and a deposit of 25,000 given by an amount of the deposit amount is not
aseguaradora.El house that can distribute the scribe at any time the juzgadoordene, proque not in his power. For
the escribanopueda entragarlo or distribute, you must order by the juzagado the guarantor to deposit in her
clerkship. If the insurance house, and because some tecnicismoo not have funds or algunotro reason, not
immediately comply with the order of jusgado, claimants are entitled to the expectation quedanen waiting the will of
the surety house. ! How many cases are filed in court porquelos sureties have not met the precise terms of his bail!
Part of the contested order reads: "It is obvious That If They delivering the deposit in the hands of the Clerk of Court
to defendant Cathay Ceramics, Inc., and its co-defendant to Jesus L. Uy, said Cathay Ceramics Inc. would be aided
in a large measure in fulfilling its Obligations to the plaintiff, the likewise Should it be obvious its co-defendants That
would be Benefited Because, then, payments for subsequent shipments would be assured. ".
The applicant, who has no interest in the P21, 792.49 cantidadde, the deposit in the clerkship with the plea that the
Court, after hearing all the parties, determines who is entitled to that amount to order payment to the party winner;
that amount is not warehouse for Cathay Ceramics, Inc. would be aided in a large measure in fulfilling its
Obligations to the plaintiff. If Cathay Ceramics, Inc.necesitaba money to properly fulfill its oblgaciones, you get it
from another source, from any bank, and not the clerkship.
The custodian says the Civil Code, can not use the thing deposited without the permission of the depositor (Art.
1766 Spanish Civil Code, Article 1977, Civil Code of the Philippines).; as a corollary, can not dispnerdel same for
another to use it. The purpose for which the amount claimed by the defendants is frustrated if one or two of them is
their own profit utilizanpara deposit.
There may, therefore, the withdrawal of court having the tank for the Cathay escribania Cermics, Inc. Jesus L. Uy
and can use it in their business.
The appeal and order the respondents, except the Judge Awarded pay the costs.
Paras, CJ, Bengzon, Montemayor, Reyes, Jugo, Bautista Angelo and Labrador, MM., Are compliant.
Separate Opinions
FAIR, J., concurring and dissenting:
The present case is not a mere action of interpleader filed by Atkins, Kroll & Co., Inc., a debtor, against several
persons Claiming preferred right to an obligation or debt due from the plaintiff, in Which the law does not require the
subject matter of the interpleader to be deposited With the Clerk of Court, as Contemplated in the dissenting review
of Mr. Justice Tuason. Nor is it a case Arising from a contract of depositum In Which the bailee is Obliged to keep
the thing deposited and can not use it without the authority of the bailor under Article 1766 of the old Civil Code cited
by the majority in Their decision to show That the respondent Judge, as a bailee, had no authority or abused its
discretion in its order of August Issuing HEREIN Complained of 5, for the mere reason That there was not and
Could not exist Such a contract of depositum Between the plaintiff and the respondent Judge .
This is a case of a deposit made by a debtor of the sum of P21, 792.49 With the Clerk of Court Claimed by several
persons as Creditors Entitled to received it, in order to relief himself of any liability under Article 1176 of the Civil
Code. Under the Provisions of Articles 1176 to 1181 Relating to tender of payment and deposit, que are the only
price provider of law applicable to the case, the money is deposited in court in custody legis (vs Manajero. Buyson
Lampa, 61 Phil., 66) and can not be disposed of by the court except in Accordance With the Provisions of Articles
Lampa, 61 Phil., 66) and can not be disposed of by the court except in Accordance With the Provisions of Articles
1180 and 1181 of said Code. THEREFORE, the respondent Judge ACTED without authority or in excess of the
court's jurisdiction in its order Issuing Complained of.
THEREFORE, we concur in the result of the majority's decision, but we dissent from the Reasons Given in support
THEREFORE.
Tuason, J., dissenting:
The law does not Provide That the subject-matter of interpleader be deposited With the clerk of court. By section 2
of Rule 14 the bringing of the money or property into court is left to the sound judgment of the judge handling the
case. In other jurisdictions do That it is held it is not Necessary to offer to bring money into court, but only to bring in
other proceedings are taken before. (33 CJ 455.) It has Also Been That held the stock-holder May be made the
bailee of the fund pending the litigation (33 CJ 451; Wagoner vs Buckley, 13 NYS 599...).
Finally section 6 of Rule 124 provides:
Section 6. Means to carry jurisdiction into effect. - When by law jurisdiction is conferred on a court or court
officer, all auxilliary writs, Processes and other means necessary to carry it into effect May be employed by
Such court or officer; and if the procedure to be Followed in the exercise of jurisdiction is not especficamente
Such pointed out by These rules, any suitable process or mode of proceeding Which May be ADOPTED
Appears Most conformable to the spirit of said rules.
The court's order of Which Petitioners complain has for its avowed purpose the promotion of the interest not only of
Ceramics but of all the other defendants, and it contains adequate substantial businesses Safeguards against any
injury to any of the interested parties.
The sole ground of objection to the Questioned orderby two of the defendant's - to wit: "the surety bond can not be
an adequate substitute for meney" - is, I think, flimsy; and the fears Expressed by This Court regardingthe delays
and Difficulties of enforcing a bond Could easily be Overcome by the selection of a solvent surety of good standing
and adequate price provider in the undertaking insuring prompt payment When the money was needed. If the court
can allow the plaintiff to keep the fund in his possession During the pendency of the suit without any obligation to
give security, why can it not make a responsible third party, with good and sufficient bond, the bailee of the money?
It is of interest to note That the remedy by interpleader is an equitable one (33 CJ 419), and That even in the end
making the court award is Not Necessarily circumscribed by the legal rights of the parties. Malthus, "where the court
has properly acquired jurisdiction of the cause as Between defendants, it is not bound to award the fund or other
thing in dispute wholly to him who has the legal title, but its shape May decree so as to do complete equity Between
the parties. " (33 CJ 467.)
By the order under consideration the respondent Judge has not violated any positive legal provision, or abused its
discretion, or any substantial businesses jeopardized anyof right of the defendants, and in interfering With That
order this court has not shown rigid paternalism In accord with its powers of review and the spirit of a sound legal
system.
The Lawphil Project - Arellano Law Foundation